Intra-Commonwealth trade and productive greenfield
investment is expected to reach 1.6 trillion dollars by 2020, in spite of the
global trade slowdown caused by the 2008 financial crisis.
This rising share of
intra-Commonwealth trade and investment underscored the growing significance of
Commonwealth markets for member countries, according to a new report issued by
Niall Jeger, Communications Officer, Commonwealth Secretariat.
The Commonwealth is a voluntary
association of 53 independent and equal sovereign states and is home to 2.4
billion people and includes both advanced economies and developing countries.
Commonwealth Trade Review 2018
said proactive policy measures such as improving trade facilitation or tackling
non-tariff barriers could trigger even greater gains for member countries.
In 2017, cumulative
intra-Commonwealth greenfield foreign direct investment was estimated at $700
billion, creating 1.4 million jobs through 10,000 projects.
The Secretariat projects
intra-Commonwealth greenfield investment – when a parent company establishes
its operations in a foreign country – could reach $870 billion by 2020.
Trade among Commonwealth
countries grew to just under $600 billion in 2016 and is expected to increase
by at least 17 per cent to around $700 billion by 2020.
trade and greenfield investment is expected to surpass $1.5 trillion,
Patricia Scotland said: “This is a remarkable indication of the power of
Commonwealth connection and of the benefits that accrue to member countries as
a result of Commonwealth Advantage.”
This, she said, was significant
with world trade only now emerging from the unprecedented slowdown triggered by
the financial crisis a decade ago.
“With rising protectionist sentiments and a backlash
against globalisation in many countries, the role of the Commonwealth becomes
increasingly important as a positive influence for strengthening trade links
across boundaries and building prosperity in which all can share.”
The review found that
Commonwealth countries, overall, were less protectionist and tended to apply
fewer harmful measures against fellow member countries.
On average, Commonwealth members
enforced commercial contracts much faster, taking 20 per cent less time
compared to the world average.
“This finding is a significant
selling point for boosting investor confidence in the Commonwealth,” the
report’s authors said.
The research also explored how
Commonwealth members can harness new technologies, especially digitisation, to
strengthen their domestic trade governance, further reducing costs and
fostering new trade and investment.
The new research reinforced
earlier studies into ‘Commonwealth Advantage’ by which Commonwealth members
tended to trade 20 per cent more, save around 19 per cent in costs and generate
10 per cent more foreign direct investment inflows.
Scotland said: “Our trade review
shows that economic and governance ties in the Commonwealth provide ready and
robust foundation fabric.
“This is from which collectively
as a family of nations we can tailor a future that is fairer, more sustainable,
more prosperous and more secure”.
The new research was prepared ahead
of this month’s Commonwealth Heads of Government Meeting, taking place in
trade and investment would be a major issue under discussion with member
countries seeking to expand markets and increase growth.
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